Britain's manufacturing sector enjoyed a better-than-expected start to 2012,
growing in January for the first time in four months, but economists said it
was too early to rule out another recession.

The Markit/CIPS manufacturing purchasing managers' index (PMI) rose to an eight-month high of 52.1, from 49.7 in December, where anything above 50 indicates expansion and anything below it indicates contraction.

Economists had forecast a smaller rise to 50.

"January saw manufacturing kick-start back into life," said Rob Dobson, senior economist at Markit. New orders and output both rose sharply and employment in the sector grew modestly for the first time in four months, rising to 50.1 on the PMI from 49.6 in December.

Companies in the sector said production was boosted by an increased willingness among some clients to spend money. Foreign demand rose for a second month, with reports of increased business with Brazil, China, the Middle East and the US.

"The rise in this index, if confirmed in other readings in coming weeks and months, hints that the UK may escape a renewed recession, having already had a decline in gross domestic product in the fourth quarter," said Michael Saunders, economist at Citigroup. "Nevertheless, it would be premature to conclude the economy is out of the woods," he cautioned.

The similar manufacturing ISM index in America climbed to a seven-month high of 54.1 in January, from 53.1 in December.

It was the third successive monthly rise, and manufacturers reported the largest increase in new orders since last April, with improved demand in both domestic and foreign markets.

"The market should take heart from this release," said Rob Carnell, economist at ING. "Somehow, global manufacturing seems to be fending off the negative influences of austerity plans and banking sector deleveraging.